A new book, The Mastery of Negotiation, Including the 22 Golden Rules, outlines winning strategies and proven processes for today’s sales environment.
The book was written to address a clear need in new-home sales: giving professionals greater control when buyers push for concessions. It does not advocate for negotiation as a default approach. However, in markets where some level of negotiation is expected, the goal is to replace uncertainty with confidence, equipping sales teams with the tools to navigate these conversations effectively.
The result, the book argues, is a more strategic approach that can drive higher sales and profits while enhancing the overall client experience. The following explores how those outcomes can be achieved.
The book starts by ensuring you conduct detailed market research to understand where you are with your three P’s: product, pricing, and promotion. What is the market time and months of supply in your market, and how do you compare to other builders?
If you are still in a seller’s market, why would you need incentives or to negotiate? However, if longer market time and months of supply show that you are in more of a buyers’ market, then maybe it’s time to embrace a well-planned pricing strategy. One part of such a strategy could be planned incentives, and the other may be acceptable negotiation guidelines within pre-approved parameters that are clear and protect profits. With incentives, make sure you are following the four rules:
Without these, you just have discounts that reek of desperation. As it says in the book: “Incentives work better as closing tools, not opening statements.”
The “meat and potatoes” of the book are the actual “How To’s of Negotiation.” Nairnsey was fortunate that he sold homes for almost two decades in the competitive sales centers of Florida where negotiation was considered normal, and also received coaching from some past masters of negotiation from other industries. He was able to practice, implement, and fine tune these strategies for new-home sales, with over 50,000 hours of actual hands-on experience, and hundreds of millions of dollars of new-home sales success. Nairnsey is thrilled to now share and pass on these secrets to future generations of eager salespeople and managers. Here are a sample of just a few of the essential Golden Rules.
What is a “win-win”? Builders and salespeople have said that they had clients who wanted to negotiate, and they replied boldly, “We don’t negotiate!” In all these cases the buyers left and bought elsewhere. So they did negotiate and lost, creating a “lose – lose.” Our goal is a “win – win,” which is:
We need to reset any negative bias we may have against the word negotiation and train ourselves to recognize a strong buying signal, or as I like to say a “big but!” In other words: “I would buy, but I want to see if I can win or earn some concessions.” It is our job to create a heightened experience for these buyers, where we make the sale, but allow them to feel as though they won something special, while ensuring we protect our bottom line.
Since we agree that “buying is emotion backed by logic,” where is the most emotional place for your clients to make their buying commitment? Exactly, in your model home, or the actual showcase home they are interested in, or a design studio if you are an OYL builder. The phone, email, and text are all terrible modes of communication to hide behind for selling and negotiation; and are rife with misunderstanding.
We are living in world where many are almost afraid of potential conflicts or feeling bad. This fear is understandable. However, when you have a buyer who wants to buy and a seller who wants to sell, we have to get over our own temporary discomfort and get together for the greater good of the sale. To paraphrase Ernest Hemingway: “We mend in the broken places.” The authors personal experience with negotiation is that if the customer comes back to the showcase home or model, then over 90% of the time the sale was made. Sometimes it was bumpy, but when the customers realized we were there to help make them acquire their dream home with honesty and integrity; we usually bonded with them and became much closer as a result of this often protracted process.
The positive positioning statement of “Let’s get together and work this out,” is both fair and opens the door to compromise on both sides. The author shares that he was scolded by realtors many times who wanted a price commitment over the phone, which he couldn’t give. However, once he met with their clients, walked the home, and homesite, reviewed their finishes, and all of the details; and then most importantly negotiated a sale; these same realtors became much happier and more grateful.
When a client makes you an offer that is nowhere near what you can accept, they often think that you will come down by a large number or oddly meet them in the middle. If you were to come down by your full allowable concession, they will only want more. Or, if you come down by too much too quickly they will get a fatal dose of buyer’s remorse. When you need their first jump in price to be much higher than their initial offer, you have no choice but to come down by a small number and also make it an odd number. Why is this so effective? Because they will believe that your bean counters back at HQ really crunched the numbers for them, and they will often settle for that exact number.
Lastly, the book discussed that negotiation is “not one size fits all,” and we have to adapt for the buyers personality style.
This also applies to our sales team, as we have to understand each of their personality styles, and how this will impact their ability to negotiate effectively. Some such as drivers and influencers will embrace negotiating in subtly different ways, while others may feel very uncomfortable and even stressed out by a negotiation strategy.
The Mastery of Negotiation, Including the 22 Golden Rules, by Roland Nairnsey is available on Amazon.